D.E. Shaw says Air Products needs ‘more rigorous capital allocation policy’

The D. E. Shaw group announced it sent an open letter to the board of directors of Air Products and Chemicals, calling for changes “aimed at addressing the longstanding underperformance in its shares and deficiencies in its governance and capital allocation policies.” Funds advised by D. E. Shaw & Co., L.P. are shareholders of APD and currently hold “a significant economic position in the company,” the firm stated. In the open letter, the firm stated in part: “We initially reached out to you privately over a month ago in the hopes of having a constructive dialogue aimed at addressing the Company’s longstanding total shareholder return underperformance as well as deficiencies in the Company’s governance and capital allocation policies… Despite having received our materials days in advance of the meeting, many of the Board members present seemed unwilling or unable to engage with the substance of our analysis and suggested actions. Instead, the Company’s Lead Independent Director, Ed Monser, indicated that a substantive response would occur at a subsequent meeting. That follow-up meeting was abruptly cancelled by the Company’s Lead Independent Director. Given the apparent lack of urgency on the part of the Company’s Board to engage in meaningful dialogue or take steps to address Air Products’ persistent and long-term share price underperformance, we are today compelled to make public our analysis and recommendations for change. We remain open to engaging with the Company in a productive and constructive manner to advance the changes we believe are necessary to improve the Company’s business, strategy, and governance.”